ICICI Prudential PMS Pipe Strategy

The Strategy focuses on fundamentally strong small-and mid-sized companies which are among the market leaders in their industries and where the market capitalization at the time of investment may be small but has the potential to become large.

Growth opportunities in small and midcap space

• The Small and Mid Cap stocks of today have the potential of becoming the next blue chips over the next decade.
• One may prudently select companies that have the potential to become large because of various dynamics like upcoming business line, quality management, improving margins etc. Such stocks offer significant potential for return.

Strategy Construct

• Consider businesses which are undergoing special situations, unfavourable business cycle or mispriced by market
• Selection of companies which may be market leaders in their industries or segment
• Aims to invest in companies where the market capitalization at the time of investment is very small but has the potential to become large
• Predominantly invests in small and mid cap companies

Why Invest?

• Invests in small & midcap companies with potential to become tomorrow’s leaders
• Opportunity to access companies with untapped earnings potential
• Potential for higher growth due to greater capacity for expansion
• Capitalizes on opportunities by having a high active share versus benchmark index

Key Details of Strategy

• Focus on Equity
• INVESTMENT HORIZON: 5 Years and above
• MARKET CAP ALLOCATION : Mid and Small Capitalisation
• NUMBER OF HOLDINGS: Focused Portfolio of ~25-30 companies
• BENCHMARK: S&P BSE 500 TRI

Portfolio Insights

Investment Approach

• Investment Objective: ICICI Prudential PMS PIPE Strategy (the “PIPE Strategy”) aims to provide long-term capital appreciation and generate returns by investing predominantly in Mid and Small Cap segment of the market by having exposure in companies enjoying some economic moat ; and/or undergoing special situations or in the midst of unfavourable business cycle.
• Types of securities: Predominantly invests in listed equity and equity related securities. The PIPE Strategy may also take exposure to exchange traded derivative instruments for hedging purpose. For liquidity or defensive considerations or pending deployment, the Portfolio Manager may invest in debt, money market instruments, mutual fund schemes or debt ETFs.
• Basis for Selection of securities: The Portfolio Manager under the PIPE Strategy predominantly invests in mid and small capitalisation companies which may be undergoing special situations or are in the midst of unfavourable business cycle.
• Investment Horizon: 5 years and above | Inception Date: September 05, 2019 | Benchmark: S&P BSE 500 TRI | Minimum Investment: Rs 50 Lacs

The PIPE Strategy features mentioned herein involves risk and there can be no assurance that specific objectives will be met under differing market conditions or cycles. The Strategy features as stated herein is only indicative in nature and is subject to change within the provisions of the disclosure document and Portfolio Management Services Agreement. Please refer to the disclosure document & Portfolio Management Services Agreement for details and risk factors. The details pertaining to the investment approach mentioned herein is a subset of details specified in the Disclosure Document. Kindly refer the Disclosure Document for the detailed investment approach before investing.